Which is better - Line of credit or reverse mortgage?

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My mom, 79, owns her home free, the house worth $540,000. I recently visited her and was shocked to see the condition of her house. The roof leaks and there was the smell of the mold. Finally she admitted that she has outlived her assets, except for the social security and the pension. I suggested a reverse mortgage, but she says her banker recommends a home equity line of credit pay for the new roof and other repair work. She wants to stay in her house especially because she likes the neighborhood and the surrounding areas. What option do you think is better?

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I will recommend the reverse mortgage, as it has got so many benefits and its meant for old people.

refer this for all kind of benefits you will get out of reverse mortgage - http://www.mortgagefit.com/reverse.html

You can also do a comparative study of how it is better then other loans
http://www.mortgagefit.com/compare-reverse.html

Thanks

colin

Hi Tyler,

Welcome to the forum

The home equity line of credit requires paying monthly installments of at least the interest only part. Since your mom lacks a good source of income, so I believe this option will not work out much. Rather suggest her that a reverse mortgage will be better. But there are huge up-front fees and one should stay in her home for at least 5 years if she wants to make up for the costs by getting the loan advances.

Thanks.

jerry · Posted: Sun Jul 02, 2006 4:37 am Post subject: RE:

Hi,

The reverse mortgage can help in times of financial problems. Your mother can use a part of the loan advances for the repair work, and for any kind of big purchase and the rest can be obtained as a credit line or lifetime monthly income. So this is the a better choice compared to an equity loan.

Thanks,
Jerry.

ckalvesmaki · Posted: Sun Jul 02, 2006 9:04 pm Post subject:

Your mother can take cash in a lump sum as well as recieve income payments. The fact that the banker recomended a line of credit is rather selfish and uncaring. The reason the banker made the recomendation is because he or she probably can't do a reverse mortgage or doesn't understand how they work

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